News Column

BlackBerry Sheds More Execs

December 17, 2013

Charles Arthur, theguardian.com

blackberry z10
BlackBerry Z-10 (file photo)

Troubled smartphone firm BlackBerry is losing three more executives, including its head of global sales, days before quarterly figures are expected to show further steep losses.

Following the departure of former chief executive Thorsten Heins in November, replaced by John Chen, the company is losing Rick Costanzo, executive vice-president of global sales, Chris Wormald, vice-president of strategic alliances, and Mark Cameron, director of global public policy.

They add to an executive clear-out, driven by Chen, that has also seen chief operating officer Kristian Tear and chief marketing officer Frank Boulben depart.

The company is scheduled to announce on Friday its results for the quarter to the end of November. Analysts forecast that revenues will be just $1.6bn (1bn), a 42% drop compared with $2.73bn for the same period a year ago, and that losses could be as much as $235m, equivalent to 44 cents per share and also that the company may have burnt through $800m this quarter.

The company has made an operating loss for the past seven quarters, including a $1.4bn operating loss in the three months to 31 August; its net profits were helped by an income tax refund of $473m but still fell to a $965m loss.

The executive departures come amid plunging consumer sales of BlackBerry handsets according to research company Kantar ComTech, which said earlier this month that sales of the company's handsets in the US, China, Spain and Japan had effectively fallen to zero in the three months to the end of October.

Chen, who is credited with reviving the fortunes of the software company Sybase, is expected to map out his vision for the company's future in the earnings call on Friday.

So far he has given little indication of how he intends to bolster the company's fortunes, which have plummeted dramatically after its BB10 software and handsets flopped following their launch in January: in September the company took a $934m charge against unsold inventory of its Z10 handsets.

Chen's only public statement has come in an open letter to customers saying that "we remain committed to delivering high quality products and services to the millions of people who rely on us globally" and that "BlackBerry has significant financial strength for the long haul".

He is expected to focus on corporate accounts, which are reckoned to make up to about 30m of BlackBerry's users worldwide. Those, however, are under siege from rival companies aiming to sell mobile device management (MDM) software to manage other smartphone makes, particularly from Apple and Samsung.

BlackBerry shares dropped on 9 December to a 10-year low of $5.75, though they have recovered to $6.11, valuing the company at just $3.15bn.

That comes despite a cash infusion of $1bn in the form of convertible debentures led by Fairfax Holdings, which has a 10% stake in the company, ahead of Chen's hiring, and its holdings at the end of the last quarter of $2.3bn in cash.

The company announced on Tuesday that it had won a contract to supply 10,000 BB10 handsets to French carmaker Peugeot Citroen.

(c) 2013 Guardian Newspapers Limited.

Original headline: Executive clear-out continues at loss-making BlackBerry


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Source: (c) 2013 Guardian Newspapers Limited.